Budgeting and Budgetary Control in Non-profit Organizations
Expert-defined terms from the Professional Certificate in Financial Management for Non-profits course at Stanmore School of Business. Free to read, free to share, paired with a globally recognised certification pathway.
Accountability refers to the responsibility of non #
profit organizations to ensure that their financial resources are used in a transparent and efficient manner. In the context of budgeting and budgetary control, accountability involves ensuring that financial decisions are made in accordance with the organization's mission and goals, and that stakeholders are informed about the use of resources. Related terms include stewardship and governance.
Accrual accounting is a method of accounting that recognizes revenues and… #
In non-profit organizations, accrual accounting is used to match revenues with the expenses incurred to generate those revenues, providing a more accurate picture of financial performance. Related terms include cash accounting and financial reporting.
Activity #
based budgeting is a method of budgeting that involves allocating resources to specific activities or programs based on their expected costs and benefits. In non-profit organizations, activity-based budgeting is used to ensure that resources are allocated to activities that align with the organization's mission and goals, and to evaluate the effectiveness of those activities. Related terms include program budgeting and zero-based budgeting.
Allocations refer to the process of assigning resources to specific progr… #
In the context of budgeting and budgetary control, allocations involve determining the amount of resources to be allocated to each program or activity, and ensuring that those resources are used efficiently and effectively. Related terms include resource allocation and budget preparation.
Asset management refers to the process of managing and maintaining a non #
profit organization's assets, including property, equipment, and investments. In the context of budgeting and budgetary control, asset management involves ensuring that assets are used to generate revenues and support the organization's mission, and that they are protected and maintained to ensure their long-term viability. Related terms include capital budgeting and investment management.
Audit committee is a committee responsible for overseeing the financia… #
In the context of budgeting and budgetary control, the audit committee plays a critical role in ensuring that financial reports are accurate and reliable, and that the organization's financial management practices are sound. Related terms include financial reporting and internal control.
Budget refers to a plan for the use of financial resources over a specifi… #
In non-profit organizations, budgets are used to allocate resources to specific programs, activities, or departments, and to ensure that financial resources are used efficiently and effectively. Related terms include budgeting and financial planning.
Budgetary control refers to the process of monitoring and controlling the… #
In non-profit organizations, budgetary control involves tracking revenues and expenses, identifying variances, and taking corrective action to ensure that financial resources are used efficiently and effectively. Related terms include budget management and financial reporting.
Capital budgeting refers to the process of planning and managing the acqu… #
In non-profit organizations, capital budgeting involves evaluating the costs and benefits of capital projects, and ensuring that they align with the organization's mission and goals. Related terms include asset management and investment management.
Cash flow refers to the movement of cash into and out of a non #
profit organization. In the context of budgeting and budgetary control, cash flow involves managing the inflow and outflow of cash to ensure that the organization has sufficient liquidity to meet its financial obligations. Related terms include cash management and financial planning.
Certified public accountant (CPA) is a professional designation awarded t… #
In non-profit organizations, CPAs play a critical role in ensuring that financial reports are accurate and reliable, and that the organization's financial management practices are sound. Related terms include accounting and auditing.
Cost allocation refers to the process of assigning costs to specific prog… #
In the context of budgeting and budgetary control, cost allocation involves determining the direct and indirect costs of programs and activities, and allocating those costs accordingly. Related terms include cost accounting and financial reporting.
Cost #
benefit analysis is a method of evaluating the costs and benefits of a particular program or activity. In non-profit organizations, cost-benefit analysis is used to determine whether a program or activity is cost-effective and whether it aligns with the organization's mission and goals. Related terms include program evaluation and financial analysis.
Donation refers to a gift of cash or other resources to a non #
profit organization. In the context of budgeting and budgetary control, donations are an important source of revenue for non-profit organizations, and must be tracked and reported in accordance with accounting standards. Related terms include fundraising and grant management.
Endowment refers to a fund of money or other resources that is invested t… #
In the context of budgeting and budgetary control, endowments are an important source of revenue for non-profit organizations, and must be managed and invested in accordance with the organization's mission and goals. Related terms include investment management and financial planning.
Expense refers to a cost incurred by a non #
profit organization in carrying out its programs and activities. In the context of budgeting and budgetary control, expenses must be tracked and reported in accordance with accounting standards, and must be managed to ensure that they are reasonable and necessary.
Financial management refers to the process of planning, organizing, and c… #
In the context of budgeting and budgetary control, financial management involves budgeting, financial reporting, and auditing, as well as ensuring that financial resources are used efficiently and effectively. Related terms include accounting and financial planning.
Financial planning refers to the process of developing a long #
term plan! For the use of financial resources. In non-profit organizations, financial planning involves forecasting revenues and expenses, identifying financial goals and objectives, and developing strategies to achieve those goals. Related terms include budgeting and financial management.
Financial reporting refers to the process of preparing and presenting fin… #
In non-profit organizations, financial reporting involves preparing financial statements, such as the balance sheet and income statement, and presenting that information to stakeholders in a clear and transparent manner.
Fund accounting refers to a method of accounting that involves tracking a… #
In the context of budgeting and budgetary control, fund accounting is used to ensure that resources are used in accordance with the restrictions and requirements of donors and other stakeholders. Related terms include accounting and financial reporting.
Fundraising refers to the process of soliciting and securing donations an… #
In non-profit organizations, fundraising is an important source of revenue, and must be planned and managed in accordance with the organization's mission and goals. Related terms include development and grant management.
Generally accepted accounting principles (GAAP) refer to a set of standards</… #
In non-profit organizations, GAAP provides a framework for preparing financial statements and reporting financial information to stakeholders.
Grant refers to a award of funds or other resources to a non #
profit organization to support a specific program or activity. In the context of budgeting and budgetary control, grants are an important source of revenue for non-profit organizations, and must be managed and reported in accordance with the requirements of the grantor. Related terms include fundraising and donation management.
Internal control refers to the process of ensuring that financial resourc… #
In non-profit organizations, internal control involves establishing policies and procedures, segregating duties, and monitoring financial activities. Related terms include risk management and audit committee.
Investment management refers to the process of managing and investing a n… #
In the context of budgeting and budgetary control, investment management involves evaluating investment opportunities, managing risk, and monitoring investment performance. Related terms include asset management and financial planning.
Management letter refers to a letter prepared by an auditor that highligh… #
In the context of budgeting and budgetary control, the management letter provides recommendations for improving internal control and financial management practices. Related terms include audit report and financial reporting.
Mission statement refers to a statement that outlines a non #
profit organization's purpose, goals, and objectives. In the context of budgeting and budgetary control, the mission statement provides a framework for evaluating financial decisions and ensuring that they align with the organization's values and goals. Related terms include vision statement and strategic planning.
Non #
profit organization refers to an organization that is exempt from income tax and is organized and operated for charitable, educational, or other public purposes. In the context of budgeting and budgetary control, non-profit organizations have unique financial management challenges and opportunities, and must be managed in accordance with laws and regulations. Related terms include tax-exempt and charitable organization.
Operating budget refers to a plan for the use of financial resources over… #
In non-profit organizations, operating budgets are used to allocate resources to specific programs, activities, or departments, and to ensure that financial resources are used efficiently and effectively.
Performance measurement refers to the process of evaluating the effect… #
In the context of budgeting and budgetary control, performance measurement involves establishing goals and objectives, tracking progress, and evaluating outcomes.
Program budgeting refers to a method of budgeting that involves allocatin… #
In non-profit organizations, program budgeting is used to ensure that resources are allocated to programs that align with the organization's mission and goals, and to evaluate the effectiveness of those programs. Related terms include activity-based budgeting and zero-based budgeting.
Program evaluation refers to the process of assessing the effectivenes… #
In the context of budgeting and budgetary control, program evaluation involves establishing goals and objectives, tracking progress, and evaluating outcomes. Related terms include performance measurement and financial analysis.
Revenue recognition refers to the process of recording revenue in a non #
profit organization's financial statements. In the context of budgeting and budgetary control, revenue recognition involves identifying the sources of revenue, tracking revenue, and reporting revenue in accordance with accounting standards.
Risk management refers to the process of identifying, assessing, and miti… #
In the context of budgeting and budgetary control, risk management involves identifying potential risks, assessing the likelihood and impact of those risks, and developing strategies to mitigate or manage those risks. Related terms include internal control and audit committee.
Strategic planning refers to the process of developing a long #
term plan for a non-profit organization. In the context of budgeting and budgetary control, strategic planning involves establishing goals and objectives, identifying strategies and tactics, and allocating resources to support the organization's mission and goals. Related terms include mission statement and vision statement.
Tax #
exempt refers to a status granted to non-profit organizations that are exempt from income tax. In the context of budgeting and budgetary control, tax-exempt status provides non-profit organizations with financial benefits and flexibility, but also imposes regulatory and compliance requirements. Related terms include non-profit organization and charitable organization.
Variance analysis refers to the process of analyzing and explaining diffe… #
In non-profit organizations, variance analysis is used to identify areas for improvement, evaluate financial performance, and develop strategies to improve financial management.
Zero #
based budgeting refers to a method of budgeting that involves allocating resources to specific programs or activities based on their expected costs and benefits, starting from a zero base. In non-profit organizations, zero-based budgeting is used to ensure that resources are allocated to programs that align with the organization's mission and goals, and to evaluate the effectiveness of those programs. Related terms include activity-based budgeting and program budgeting.